Indices and Reports

Financial services firm VanthedgePoint Group has announced that its emerging hedge fund clients have generated average returns of 16.74% in 2006, outperforming the major hedge fund and U.S. stock market indices.

Emerging hedge fund managers have trouble raising money, but when they do, they are increasingly likely to invest in index products, according to the second annual Emerging Hedge Fund Manager Survey from Vanthedge Point Group.

Burned by poor performance and shaken by the Amaranth Advisors fiasco, investors stanched the flow of new money into hedge funds in the fourth quarter, though it was still a record-setting year for inflows.

Hedge funds added $15.8 billion over the past three months, a 64% drop from the $44.5 billion raised in the third quarter, Hedge Fund Research reports.

A new survey of the U.S.’s richest households finds that hedge funds have fallen out of favor with the people who pioneered investing in them: high-net worth individuals. While hedge funds continued to bring in new money last year—primarily from institutional investors—in spite of their myriad troubles, the richest Americans fled, and the richer, the faster.

Echoing the findings of other indices, Hedge Fund Research’s year-end results for its HFRI indices shows emerging markets had a very big year in 2006. The HFRI Emerging Markets (Total) Index ended the year up 24.29%, following a huge December in which it returned 3.47%.

It was a banner year for U.S. private equity fundraising, with a record-setting $215.4 billion committed to 322 funds last year, according to industry newsletter Dow Jones Private Equity Analyst. That total shattered the old record, set in 2000, by 22%, and was one-third higher than 2005.

From the current issue of

MODERN TRADER explores the effect of a potential trade war on U.S. equity markets. Will it end the bull run or will low interest rates allow U.S. equities to maintain its momentum? Read on. We also attempt to identify the key drivers of active equity hedge funds.